After months of trying and failing to recover $1 billion in Alameda Research trading funds frozen by the Chinese government, Sam Bankman-Fried allegedly gave the order to send a $150 million bribe to government officials. Not all of his employees were on board.
The Chinese government had frozen Alameda’s accounts at Chinese crypto exchanges OKX and Huobi (now HTX) as part of an investigation into money laundering, ex-CEO Caroline Ellison testified during FTX founder Sam Bankman-Fried’s trial. The $1 billion was a substantial portion of Alameda’s trading capital at the time, and Bankmand-Fried quickly assembled a team to recover it that included Ellison, other high-level execs, and David Ma and Handi Yang, two Alameda employees with “connections to China.”
After several in-person meetings, and messages exchanged in a dedicated group on the encrypted messaging app Signal, the team hired a lawyer to negotiate with the Chinese government, which took several months but produced nothing. Alameda also tried using the IDs of Thai prostitutes to get the funds out through incognito accounts. That also failed, Ellison explained.
Former employee David Ma allegedly had another plan: bribing Chinese officials. But Yang, whose father was a Chinese government official, was strongly opposed.
On one occasion, Yang objected repeatedly to Ma’s idea, but Bankman-Fried told her to “shut the fuck up.”
Disregarding Yang’s opinion, in November 2021 Bankman-Fried allegedly directed employees to send $150 million in a series of transactions to several crypto wallets, according to Ellison, that she believed to be controlled by Chinese government officials.
Yang later quit the company on apparently bad terms, and SBF and former Alameda co-CEO Sam Trabucco joked about the alleged bribery incident.
“Did Handi’s father immediately turn us in or something,” Trabucco wrote in a signal chat.
“LOL,” Bankman-Fried responded.
After almost a year, according to Ellison, Alameda succeeded in getting the $1 billion back, but the whole operation was kept under wraps.
In a November update she later made to SBF, Ellison referred to the alleged $150 million bribe as just “the thing.”